Banks are finding it harder to fight proposed reforms of the $300 trillion U.S. privately traded derivatives market because of outrage over JPMorgan’s credit derivatives losses.
NEW YORK | Mon Jul 16, 2012
Lobbying efforts continue, nonetheless, as many important rules have not been hammered out.
The industry pushback against proposed regulations mandated under the Dodd-Frank legislation of 2010 was the latest move in the roller-coaster world of financial crisis and reform.
The pushback had been gaining momentum before JPMorgan Chase & Co said in May it lost at least $2 billion failed derivative trades.
But the furor over JPMorgan’s losses has made passage of these bills less likely, said sources who are in regular contact with members of Congress.
On Friday, JPMorgan said its losses came to at least $5.8 billion, some of which may have been hidden purposely.
“We definitely saw people stepping back from public support of this kind of legislation after JPMorgan’s derivatives losses,” said Marcus Stanley, a policy director at Americans for Financial Reform, a coalition of more than 250 consumer, community, labor, small business and other pro-reform groups.